Tallahassee - The Florida Office of Insurance Regulation (OIR), today, notified the State Farm Florida Insurance Company of its intent to disapprove the company's recently filed Mobile Homeowner insurance rate increase.
Commenting on the action, OIR Director Kevin McCarty said, "We have carefully reviewed the data and material State Farm Florida had submitted to support their request, in addition to holding a public hearing on the matter. We have determined that the rate increase is not justified."
State Farm Florida filed the request for an increase on March 3, 2003. They requested an average statewide rate increase of 57.8 percent. By county, the rate increases were slated to rise from a low in the single digits to almost 200 percent. A public hearing on the matter was held in Clearwater, on May 29, 2003.
After reviewing State Farm Florida's rate filing, OIR determined that it did not contain sufficient justification for the proposed rate increases. OIR cited 16 areas of the filing that were determined to be deficient and decided that the company hadn't supported their request.
Should State Farm Florida elect to appeal the OIR notice of denial, they have two options from which to choose: The insurer may demand to go to arbitration, or the insurer may request a hearing before the Division of Administrative Hearings, in Tallahassee. If the company decides to petition for either of these proceedings, they must notify OIR within 21 days.
Because State Farm Florida filed the rate request under what is called use and file, the company was permitted to institute the rates while any OIR action is pending. However, if the OIR denial stands, any overcharges will be returned to policyholders. The rate increases were permitted to go into effect on March 15, 2003 for any new policies and on June 15, 2003, or thereafter, for any renewal business.